• Corporate debt liabilities are increasing through loans from banks, while the share of foreign borrowing has declined slightly
• Household savings continue to grow faster than loans.
• The Estonian economy was a net borrower again in the first quarter for the first time in more than two years

Yearly growth in corporate debt liabilities reached 3.7% in the first quarter. Growth in corporate debt has been driven in the past half year by loans from the domestic financial sector, the stock of which was 9% larger in the first quarter than a year earlier. The amount taken in loans from abroad or issued as bonds abroad shrank by 2% at the same time. The share of foreign loans in the debt liabilities of companies is a couple of percentage points lower than a year previously, and was 32% at the end of the quarter.

The volume of household loans was 5.6% larger than a year ago. Growth was much faster in loans and leases from leasing companies and other credit intermediaries¹ than in bank loans. The share of all loan liabilities that was issued by such lenders climbed to its highest level ever at 9%. Yearly growth of 7% in household cash and deposits remains faster than growth in loans, but the gap has narrowed in recent quarters.

Yearly growth in the debt liabilities of households was faster than nominal growth in the economy in the first quarter. This did not have any significant impact on the level of debt in the non-financial sector though, and it remained at 130% of GDP.

The Estonian economy was a net borrower again in the first quarter for the first time in more than two years. In most quarters since 2009, Estonian residents have put more funds abroad than they have taken in from abroad, reflecting the decline in investment in the Estonian economy and increased saving. Although the financial transactions position was negative for a long time, there were no substantive changes in the financial behaviour of households. Companies reduced the loans they issued to other companies and their participation in other companies, and at the same time they increased their financial liabilities by taking out long-term loans.